SET-listed Bangchak Petroleum Plc (BCP), a majority state-owned oil refiner and retailer, has earmarked 90 billion baht for capital expenditure in its six-year business plan starting this year.
Emphasis will be placed on exploration and production.
Newly appointed president Chaiwat Kovavisarach, speaking to the press for the first time yesterday, said his company was setting aside a substantial amount to expand into exploration and production, green power plants and renewable energy.
The refining business, however, will remain the major revenue generator over the next six years.
Mr Chaiwat said up to 50 billion baht of the six-year capital expenditure would go to non-refining business, noting that the company was interested in oil and gas blocks in the Gulf of Thailand.
Bangchak plans to build more biogas and biomass power plants to generate an additional 300 megawatts over the next two years as well as continue with plans to raise production capacity for biodiesel to 810,000 litres a day from 360,000 litres a day.
Under the company's exploration plan, 53% of the investment would occur elsewhere in Asia, 42% in Thailand and 5% in the rest of the world.
Mr Chaiwat said Bangchak was allowing 20 billion baht for maintenance and another 20 billion for expanding existing businesses such as increasing the number of petrol stations.
Bangchak plans to add 400 stations to its network to reach 1,500 by 2020.
"We're diversifying our business into other non-oil and green energy sectors to help offset possible lighter revenue from weaker oil prices we faced in the previous year," Mr Chaiwat said.
The company plans a 3-billion-baht bond issue to raise funds for investment.
"We don't need to do any rights issue for the 90-billion-baht expenditure since we have cash flow of 30 billion baht. Then we would issue bonds with the aim of raising funds for further investment," Mr Chaiwat said, declining to provide details about the bonds.
Surachai Kositsareewong, senior executive vice-president for accounting and finance, said the bonds would be issued early next month to raise 3 billion baht for investment in green energy.
"It will be a 12- to 15-year bond called a Green Bond to fall in line with the concept of green businesses that we would invest in," he said.
Mr Surachai said earnings before interest, tax, depreciation and amortisation (ebitda) would likely reach 10.4 billion baht this year, up from 5.16 billion baht last year, when the company had to bear losses of up to 4.3 billion baht from oil inventories at a time of plunging crude prices.
Ebitda is expected to jump to 25 billion baht in 2020, driven by increasing revenue from green power plants and other eco-friendly projects, which have the potential for strong future growth that would stabilise the company's earnings amid volatile oil prices.
Mr Chaiwat gave a brief update on a plan to purchase the remaining Bangchak shares held by PTT Plc, saying an offer for the shares on behalf of Bangchak employees had already been turned down.
He and another Bangchak executive were among a group of four that proposed an earlier buyout deal to PTT.
"We will not go on with the plan to buy back Bangchak shares," Mr Chaiwat said.
PTT, the national oil and gas conglomerate, has sought to spin off its refinery business by selling 15% of its stake in Bangchak to the state-owned Vayupak Fund and the remaining 12.2% to another bidder.
An industry source named Mermaid Maritime Plc, a subsidiary of shipping group Thoresen Thai Agencies Plc (TTA), as a potential bidder for the 12.2% stake.
The source said TTA, Susco Plc and PTG Energy Plc had withdrawn their bids.
BCP shares closed yesterday on the SET at 32.25 baht, up 75 satang, in trade worth 101 million baht.